HK Electric Investments: Yield premium compressed to 2SD below historical; maintain Neutral

研报英文原文证据摘录

HK Electric Investments: Yield premium compressed to 2SD below historical; maintain Neutral

Global Research

15 June 2026ab

HK Electric Investments Equities

Hong KongYield premium compressed to 2SD below

historical; maintain Neutral Electric Utilities

12-month rating Neutral

12m price target HK$6.40FY25 roll forward lifts PT to HK$6.40, but thin yield premium keeps us at Neutral

Prior : HK$6.00

We maintain our Neutral rating on HKEI and lift our price target to HK$6.40 from HK

$6.00, rolling our dividend discount model forward on FY25 results and marking it to Price (15 Jun 2026) HK$6.41

actual. We continue to see HKEI as a high-quality, low-volatility yield asset, a pure-play RIC: 2638.HK BBG: 2638 HK

Hong Kong regulated electricity utility. We see the investment case as a quality business

whose yield support has thinned, with the premium investors are paid to hold it now at Trading data and key metrics

46bp over the US 10-year treasury, which is over 2SD below its historical average and 52-wk range HK$7.05-5.69

below the sector average of 135bp. We forecast flat DPU of HK$0.32 through 2028E, Market cap. HK$56.6b/US$7.23b

leaving limited upside from current levels and the re-rating case dependent on the Shares o/s 8,836m (ORD)

relative yield gap rather than earnings growth, in our view. Free float 46%

Avg. daily volume ('000) 3,721

Regulated returns underpin stable, low-volatility income Avg. daily value (m) HK$24

We see HKEI's appeal resting on the stability of its regulated earnings rather than on Common s/h equity (12/26E) HK$49.7b

growth. The SoC regime insulates earnings from fuel-cost and demand swings, and P/BV (12/26E) 1.1x

underpins six consecutive years of flat DPU at HK$0.32. We note FY25 distributable Net debt to EBITDA (12/26E) 5.4x